wills and trusts

Wills and Trusts

Not many people understand what a Trust is and how it differs from a Will. There are many types of Trusts, but the one main benefit of all Trusts is how they will keep your estate out of probate after your death.

The main difference between a Trust and a Will is the fact that your property won’t go through probate when you die. With a Will the transfer of property takes place at your death and will need to go through the court system, (probate) to determine the legalities of the will and the properties being dispersed. During probate much of the estate is taken by taxes and sometimes attorneys. When you create a Trust you transfer your properties to it while you are still alive and it continues on through your death.

When you create a Trust you transfer all your property, assets, bank accounts, securities, real estate to a person or persons you “Trust”. You no longer own these assets, the “Trust” does. You still have access to all these assets while you are alive. You instruct your Trust to pay out all income to you during your lifetime, and on your death whatever is left would be given to your beneficiaries. You can put instructions in the Trust as to who has access to it. Your property will avoid probate after you die. You will need to appoint a trustee to take care of the Trust and follow it’s directions. The neat part is, you can be your own trustee. You can be the person that is responsible for taking care of all of the assets while you are alive. You can still control your assets and decide what you want to do with them. After your death your Trust would be passed on to a successor trustee that was named in your original Trust.

WILLS Defined
	With a Will the transfer of property takes place at your death and will need to go through the court system, (probate) to determine the legalities of the will and the properties being dispersed. During probate much of the estate is taken by taxes and sometimes attorneys.

What is a...

Living Will
The Illinois Living Will Act, 755 ILCS 35/1, et seq., allows for execution of a living will, which can be used to direct treating physicians to withhold or withdraw medical treatment in cases of a terminal condition, if you are no longer able to communicate your wishes. If you have questions about whether you should execute a Living Will, contact an attorney.

Pourover Will
A pour-over will is a testamentary device wherein the writer of a will creates a trust, and decrees in the will that the property in his estate at the time of his death shall be placed in the trust. The pour-over clause protects property not previously placed in a trust by pouring it into the previously established trust through the vehicle of the will.

COMMON WILL PROVISIONS:
While each person's will is unique, most wills contain similar provisions to avoid common problems. Such as:

• revocation of all prior wills,
• payment of all medical and funeral expenses,
• distribution of property through a residuary clause (all my property) or a specific bequest (an individaul item of property),
• providing for the protection of a minor child through granting certain powers to the executor,
• appointment and granting specific powers to a named executor,
• appointment of a guardian for minor children,
• a statement that you have served in the Armed Forces and a direction to your executor to inquire into whether your family may be entitled to benefits.

TRUSTS Defined
	There are many differences with the wording of Trusts and many different types of Trusts. However, there are two basic distinctions the Living Trust and the Testamentary Trust. A Living Trust is created and instated while you are alive. A Testamentary Trust is carried out after your death from instructions given while you were alive. There is also the distinction of revocable and irrevocable Trusts. A revocable Trust can be changed, added to, taken from or stopped at anytime by the person instating it. If the Trust does not specifically state that the Trust can be revoked or amended,then it is an irrevocable Trust and can not be altered, ever.

	Here are some reasons to create a Trust. ·• To run and support a business ·• Take care of minors • Pay for medical bills ·• Create a scholarship fund ·• Hold real estate, cash, securities or property · • Avoid probate ·• Save on Federal taxes · • To hold all your assets together for future instructions

	History of Trusts - Where did trusts come from?
	According to financial planning experts the first “Trusts” were done as much as two thousand years ago during the reign of Augustus Ceaser. It is thought that a Roman citizen wanted to pass on his property to his children but his wife was not Roman and therefore the children could not have the property. He left all his property to a Roman friend who promised that when he died he would use the property to take care of his children. This way he side stepped the law. He trusted his friend to do what he wanted with his property after his death, thus the term ‘Trust’ came about.